[HN Gopher] Betting on things that never change (2017) ___________________________________________________________________ Betting on things that never change (2017) Author : Brajeshwar Score : 271 points Date : 2022-11-21 14:14 UTC (8 hours ago) (HTM) web link (collabfund.com) (TXT) w3m dump (collabfund.com) | A4ET8a8uTh0 wrote: | There is something of a campaign going on now and it is not | 'cool' to compliment some billionaires. Apart from this, there | are valid real reasons to dislike to former Amazon's CEO. | | That said, reading his early interviews it hard not be impressed | by the foresight and insight. I personally do think he got some | things wrong ("if you can't measure it, you can't manage it" | mantra being one of them ) or at least got others to | misunderstand it, but it is hard to deny the results he helped | manifest. | | It is the same impression I have of Thiel. | cercatrova wrote: | > _There is something of a campaign going on now and it is not | 'cool' to compliment some billionaires._ | | I've seen this when HN shifted from YC applicants, ie startup | founders, to tech workers in general. There is quite a paucity | of startup news that's not necessarily related to the wider | tech ecosystem. | nordsieck wrote: | > I personally do think he got some things wrong ("if you can't | measure it, you can't manage it" mantra being one of them ) | | Could you explain this point more. I'm genuinely curious. | triceratops wrote: | https://en.wikipedia.org/wiki/Goodhart%27s_law | extragood wrote: | From my perspective: there are some things you fundamentally | can't measure. | | One of the teams I manage is technical support (B2B SaaS). | Support's core functionality in an organization is to prevent | churn. If a customer reaches out to support, they have some | issue that is blocking them from using your product | effectively. If you are unable to unblock them, then you risk | them switching to a competitor. The problem is that not | _every_ support ticket /interaction will result in churn so | we can't really directly measure how effective we are at our | core function. So instead we measure the number of tickets | raised, customer satisfaction, adherence to SLAs, etc, which | is as good of an approximation as we can get with the | resources we have available to us. | | In my case, those numbers all look reasonably good, so I'm | treated as an effective manager, even though we don't (and | maybe can't) really know how much churn we've prevented. I | wish we could though - it would make my arguments to | executives on behalf of the support team that much easier to | say, hey we retained $XXXXXX in revenue over this period. | A4ET8a8uTh0 wrote: | Sure. Some context may be needed. I suppose my views are | formed in this way partially, because I became an MBA after | having soul crushing jobs, which does tend to change your | perspective a little bit ( and give you an insight into what | is going on in a head of the front line drone that is forced | to implement orders the best way he/she can ). | | << "if you can't measure it, you can't manage it" | | 1. It is wrong in a literal sense. You obviously can. Maybe | you should not ( which is a valid question to ask ), but you | absolutely can manage things and not measure everything. | | 2. It is wrong when taken metaphorically to a logical | conclusion. The mantra seems to encourage ( and did encourage | based on some of the things managers tried to measure -- | lines of code come to mind ) measuring everything. In | accounting, there is a concept similar law's 'de minimis' ( I | kinda don't want to use that name, because I worry people | wills start questioning that from tax perspective, which is | its own animal I don't want to touch, but in practical terms, | the name matches the concept exactly - basically 'too small | to matter'), where accounting for some items in some | processes is borderline pointless ( say a screw ). Every so | often, people in accounting classes go 'but what if', 'but we | can track it'. And the answer is invariably: 'You can, but is | it worth it?' | | Naturally, you could counter it with: 'Well, you don't know | if you don't measure it.', but there has to be a point at | which the tracking of atoms get too crazy. | | So that is my basic thought on the matter. I can expand a | little more, but I think that covers it. Note, I am not | saying it is not worth it to measure stuff. I am saying it is | important to be discriminating over what you pick to measure, | because, people being people, will optimize for it. | startupsfail wrote: | If you purchase a toy at Amazon and it is contaminated with | lead or cadmium paint, you would not notice. And even if you | would, there is no one legally responsible. That outfit in | China that sold it doesn't care. And Amazon is just a | marketplace and is not responsible. | | Toy stores (Toys"R"Us) used to be a thing. They were legally on | the hook, if they'd sell contaminated toys. Now no one is. And | unfiltered toys from China are shipped directly. | hippich wrote: | Recently I relisted a simple 3d printed attachment for Nerf | gun on Amazon. It got assigned to toys category. Listing | never went live because they wanted all kinds of | documentation about kids safety. Obviously it was not worth | it for me and I dropped the idea. | | I did sell it in the past without all these issues. So things | do change in terms of safety, and likely because there is at | least some liability on Amazon | mnsc wrote: | I'm not an Amazon customer so it doesn't apply to me, but I | hate/don't use Amazon because it's too cheap and deliver too | fast. | sedeki wrote: | Do you live by this motto more generally? I'd love to have you | as a customer. | mnsc wrote: | I also hate a lot of companies that are too expensive, trying | to sell you status but not backing it up with quality. So I | would love it if you could sell me high quality products that | are repairable and doesn't unnecessarily tax neither our | planet nor the humans involved in creating them. What are you | selling? | sacrosanct wrote: | Amazon blends both worlds together. Invention coupled with | stagnant business models which have worked for millennia. | CrypticShift wrote: | > You can make big, long-term bets on these things, because | there's no chance people will stop caring about them in the | future. | | I wish more VCs thought about investing in our sustainable future | on earth, the way Morgan Housel thinks about investing in | sustainable companies. | | The only assumption that keeps us from that step is that all | people care about is their short-term rational self-interest. | | _of course, they do! what else would they care about? How can | you even imagine a Market without that assumption?_ | | Yeah... let's just continue to bet. I personally bet there are | some "timeless" things that will definitely change soon. | bilekas wrote: | It's amazing how well it reads for something that really seems | like just common sense. | Swizec wrote: | The best insights feel like obvious common sense _after_ you | read them. But you didn't know it, or know how to verbalize it, | beforehand. | locallost wrote: | > customers want low prices, and I know that's going to be true | 10 years from now. They want fast delivery; they want vast | selection. It's impossible to imagine a future 10 years from now | where a customer comes up and says, "Jeff I love Amazon, I just | wish the prices were a little higher." | | Actually there is one thing people are starting to desire -- less | choice. I think some kind of curated content for anything has a | lot of potential because mostly I do not care if I get the 100% | perfect thing, I care about it being 80% right and not a | headache. The time investment is not really worth the trouble to | find the perfect thing. | awillen wrote: | I think that's true for fungible goods - it's a pain when you | search for something generic like dish soap on Amazon and get | 10000 kinds - but not for non-fungible goods. When it comes to | books, I want Amazon to have as wide a selection as possible. | locallost wrote: | True, maybe that's the context of the original quote. I don't | think about Amazon anymore as a book store so my mind went | somewhere else. | strix_varius wrote: | I think this maps to some of the alternate "bets" at the bottom | of the post: | | - Faster solutions to problems ("buy the best widget for me" | button > two hours of amazon + google + reddit research) | | - Increased confidence/trust (trusting that "buy the best | widget for me" really _is_ the best widget for me, not the one | with the highest affiliate-link returns) | Nemi wrote: | Exactly why Costco is more and more popular. They essentially | do curation of goods available on the market and they sell them | at a good price. When I go to Costco I know I might not get the | best item on the market, but I know I will get a decent product | that fits my needs at a decent price. It is all about saving | mental energy for other things. | 0cf8612b2e1e wrote: | Well said. I just ordered a 4k monitor for my home office | from Costco - it was basically the only model they sell. My | normal mode of operation is to spend hours trying to research | the specs that matter, find a good price, etc. Instead, I | assumed I was getting something reasonable and bought it | without any research. | | Given that today's sellers make it nearly impossible for a | consumer to compare items (store exclusive SKUs, component | swaps in same SKUs, astroturfed reviews, and even inventory | co-mingling), a curated marketplace is worth so much. | themitigating wrote: | That might be for you. I actually prefer options and | customization and if it's taken away I'm more annoyed than if I | never had it. | pfdietz wrote: | I prefer having the choices I want not being submerged in an | ocean of crap. | locallost wrote: | People are definitely different and that people want choice | has definitely been correct for a long time. But I'm noticing | it not only in me, but with people around me -- they're just | tired from dealing with choosing from 100 different things | when they only need 3. Especially because most of them are | the same. The internet has made this worse than ever. | Companies like Apple have shown this is possible - they | basically tell the user "this is what you need" and people | accept it and it's worked. | jahewson wrote: | I don't think you mean 80% right. You mean 100% right on the | things you care about. If I need a widget that fits some size, | is child-safe, doesn't quickly break and costs less than $300 I | can't accept 80% right. Sure I don't care about the color or | brand but they weren't criteria of mine to begin with. | [deleted] | JauntyHatAngle wrote: | There are already things that solve choice, e.g. brands and | reviews. | | Perhaps I'd understand what you meant with an example? What | products are you finding is too varied? | larrik wrote: | Do those solve it? I don't really trust either. When | everything is made in China anyway, sometimes those garbage- | looking Chinese brands are just as good as or better than the | name brand stuff, and sometimes they aren't. | | Some brands build a lot of reputation on quality, and then | cash it in for higher profits by suddenly switching to low | quality (American appliance brands were notorious for this, | with a sort of round robin selection on which brand had | actual quality behind it for any given year). | mbesto wrote: | > There are already things that solve choice, e.g. brands and | reviews. | | Agreed with this, which is essentially why Amazon's | e-commerce is probably doomed. Reviews have become unreliable | and brands lack consistency on their site (is it fake? is | this an officially branded product? who is actually selling | me this?) | | This is why I've got my bet on Shopify. | | > What products are you finding is too varied? | | I would argue virtually every category suffers from too much | choice: https://en.wikipedia.org/wiki/The_Paradox_of_Choice | loudmax wrote: | "Doomed" seems a strong take, but I totally agree that | Amazon is leaving e-commerce ripe for disruption if they | don't address the trustworthiness of their reviews. | | The paradox of choice would be mitigated by better trust, | and better user interface. These aren't necessarily easy | problems to solve, but Amazon should have the resources to | solve them, if it only had the will. | andyjohnson0 wrote: | I'm not the person that you replied to, but have you tried | searching for e.g. usb memory sticks on Amazon? | locallost wrote: | Exactly this. | diffxx wrote: | > Or, "I love Amazon, I just wish you'd deliver a little | slower." Impossible. | | Given the externalities involved in Amazon style delivery, I | personally wish they would optimize more for throughput than | latency. | adamsmith143 wrote: | >Actually there is one thing people are starting to desire -- | less choice. | | Maybe not less but easier choices. It's hard to tell which | frying pan is the best when there's 100 nearly identical | listings all with 5000+ 5 star ratings which may or may not | have been gamed. There's not a great way to tell the objective | quality of a product before you buy it. | llbeansandrice wrote: | This is why I've begun prioritizing returns and exchanges and | good customer service. Even with a high-quality product it's | possible to get a lemon. Doesn't matter if I can just return | or exchange within a reasonable time-frame. | fataliss wrote: | I think it's partially true and I definitely fall under the | category that hates to sink hours into searching for the best | YYY where YYY is a random $30 item. But I don't necessarily | want less choice, I just want something/someone I can trust. If | I could just believe that the "amazon choice" was actually | tested thoroughly and matched a quality standard I can get | behind, then I'd happily get the "amazon choice" of most | things. | barbazoo wrote: | > It's impossible to imagine a future 10 years from now where a | customer comes up and says, "Jeff I love Amazon, I just wish the | prices were a little higher." | | Except that many consumers these days do look for business that | are more socially responsible and pay their fair share | downstream. | | Personally I _am_ seeking out business that pay good wages and | are responsible to the environment. Obviously that 'll lead to | higher prices so in some way I am wishing for higher prices. | tabtab wrote: | This reminds me of Oracle Forms: It was by today's standards | simple, cheap (overall), facilitated compact code that mirrored | close to biz logic, and easy to deploy. It used a kind of "GUI | browser" so you didn't have to install executables to use and | update apps, just one "browser". But Oracle rewrote the client | into Java, and Java's deployment flaws dogged it, so co's had to | gradually abandon it. They should have kept it in C. (The | developer's side stayed mostly the same, it was deployment's side | that got the headaches.) | | It wasn't esthetic, but got most CRUD jobs done quick and simple. | I've never coded in it myself for production, but observed | amazing productivity at multiple orgs. There's something magic | about it. | | Oracle originally had to cater to many OS's, so were parsimonious | with GUI features. Thus, it has just enough to do typical CRUD | jobs but not enough to distract, confuse, and over-complicate the | tool. They didn't get feature-happy over time. Once you learned | how to milk existing features, you realized you really didn't | need boatloads of pluggins. | | Current web stacks are bloated nightmares and business money | sinks in comparison. I'm not saying bring back Oracle Forms as- | is, but at least borrow its best lessons. We'd have more | practical GUI web standards by now. (Most CRUD productivity don't | need mobile UI's. Also, it may not do well for big "enterprise" | apps, but for small and niche it groves.) | PaulHoule wrote: | Like a stopped clock? | | I'd grant that Amazon has a large selection and that's an | advantage over competitors. | | As for pricing, I wouldn't say Amazon is expensive but it is not | consistently low cost and it is not unusual to see something on | the shelves at Target for $50 that is selling for $70 on AMZN. I | think after all these years, and particularly with Prime, AMZN | has gotten people in the habit of looking to AMZN first and you'd | expect them to cash in on it. | | The better selection than other retailers is a durable advantage. | I'd call out Best Buy for having a poor selection in comparison, | particularly being overly wide (they sell washing machines, | grilles, and mirrorless cameras and parts to build PCs) but not | sufficiently deep (no selection of lenses for those cameras, no | quality tripods, a very limited supply of PC parts.) It begs the | question of "Why am I going to drive to Best Buy where they might | have some of the things I need when I can order them all online | from Amazon or a specialist retailer?" | | The flip side is that the marketplace puts a lot of junk products | in the AMZN catalog. I'd never buy anything that is likely to be | counterfeit on AMZN (Nike only from the Nike store) and I learned | the hard way not to buy a thermal printer that is marketed with a | size in mm instead of inches. | [deleted] | iamwpj wrote: | Amazon has never paid dividends to investors. Its only value is | to invest against interest rates or inflation. In fact, if | investors wanted dividends it might upset the ability of Amazon | to provide its objective. It's stable, but only philosophical. | This isn't a land investment or something. It's an extension of a | long term trend of consumerism. | ChadNauseam wrote: | Amazon did a $10B buyback in march | quickthrower2 wrote: | A good article but feels more table stakes than secret sauce | stuff. The advise crosses to non startups too. It is a why you | have a bunch of different X targeting market segments for all X. | For example Pizza, flights, cars. | a_c wrote: | I thought the article is about change is the only constant yada | yada hence we should embrace change. How wrong was I. | | > which is that an insurance company selling directly would have | a cost and convenience advantage over those paying brokers. | | Put it into software, to me it is about eliminating | abstraction/boundary/communication. Frontend and backend is an | invented boundary. Product and Dev is an invented boundary, | CS/QA/Documentation and dev is also an invented boundary. Whoever | break the most of the imaginary boundaries is going to make | software building so much faster | findalex wrote: | - Everyone wants affordable housing (lets find ways to bet on it) | | - NINJA loans, swaps, CDOs, etc. | | - housing markets collapses | yellow_lead wrote: | (2017) | hallqv wrote: | Basically what YC has been touting for years, focus on problems | not solutions. | itissid wrote: | Ad infinitum: Fire, or equivalently burning something, is an | unchanging idea which is the only way humans have and used over | and over to get where we are. | ttul wrote: | What rings true for me in this article is the notion that, as a | founder, it's better to pick a problem space than it is to pick a | solution. Amazon chose to live in the problem space of how to | bring consumers more products, more conveniently, at a lower | price. Geico chose a similar goal but in insurance. | | Technical founders often focus on a particular cool way of | solving a problem and burn lots of capital building that thing. | Sometimes the thing is the right thing and everyone makes money. | But sometimes it's not. Yet if you stick with the same problem | space for long enough, and aren't too connected to your | particular solution, I think you have a greater chance of | succeeding. | | Okay, go ahead and poke at my pontifications now. I'm ready. | nathias wrote: | this is a great strategy if you already have near infinite | resources | [deleted] | cpeterso wrote: | Sometimes quoted as "Fall in love with a problem, not a | solution." | lazide wrote: | Well, except what you're describing fundamentally leaves the | hardest problem unsolved. | | Where to start (concretely) and what _you're actually going to | do_ , and _if it will work for customers in a way they will pay | you more for it than it costs to do_. | | Discovering that, and if it is going to work, is what a startup | does. | | You can't do it without deciding on something concrete | eventually to deliver, and pursuing it with enough vigor to get | a workable product in someone's hands. | | Tech startups that build an entire product without | understanding the space are leaning too heavily in one | direction. | | Sales led startups that get a customer base and start | collecting money without a concrete product plan are leaning | too hard in the other (and even more, add big red flags for | scams and fraud). | | Doing all the things and integrating it into a workable | collection of customer needs they'll pay to solve, along with | an actual solution that works to solve it, while not going | bankrupt in the process _is why startups are hard_. | | Not being a scammer or committing fraud in the process? Harder | still! | | It's the unknown unknowns and navigating all the bullshit on | the way that also make the risk very high. Fundamentally, it's | impossible to know everything until you've already done it, and | by then, it's already changed under you. | [deleted] | barumrho wrote: | I generally agree with your statement, but it depends on what | your goal is. Ultimately, do you want to build a successful | business or bring a (specific) new technology into the world? I | suspect the former is true more often and it can lead to | innovations along the way, but there is nothing wrong with the | latter. | jbaczuk wrote: | Great observations! | aquafox wrote: | > Technical founders often focus on a particular cool way of | solving a problem and burn lots of capital building that thing. | | This nicely summarizes the current hype in Bitcoin or deep | learning. | noobker wrote: | I was once at a talk with several medical technology founders. | One of them namechecked specific legislation that enabled their | solution to come to market. And so I asked, "How do you survive | if only 1 law is prying open the opportunity for your | business?" | | They replied that their business exists to solve a need -- a | need that exists regardless of the specific regulations. Should | the regulations shift, a company motivated beyond a specific | solution will adapt to keep meeting its customers' needs. | Moodles wrote: | Totally agree. For a negative example see all the companies | desperately trying to find sone problem for blockchain to | solve. | [deleted] | yobbo wrote: | Depends on perspective. What is _one thing_ and what is a | _problem space_. | | Is a microprocessor or a mobile phone one thing in many | different problem spaces? | TuringTest wrote: | Businesses are not built on things they sell, they are built | on the customer problems they help solve. | | If you build microprocessors, you better understand how your | clients are using them to create electronic devices, and | provide all the services and documentation they may need. A | less potent microprocessor paired with a website that | perfectly explains how to use it and what use cases it | supports will win any day over a more powerful chip that no | one understands. | yobbo wrote: | Yes, but the investment in things can be so great that it | becomes impossible to change according to customer | preferences. The business then has to find new problem | spaces for their things. | kmonsen wrote: | Isn't Amazon's cash cow AWS which is not in that problem space? | SatvikBeri wrote: | AWS is Amazon's _most_ successful business, but they were | wildly successful even without it. AWS only launched in 2006, | 12 years into the company. | | Today, most estimates I could find put AWS at 25%-50% of | Amazon's worth. | choxi wrote: | I think maybe the fundamental hard thing about startups is that | you can't ignore the problem space or the solution space. It's | not like Bezos was passionate about selling cheap books for | years before Amazon, he saw that this new Internet thing was | going mainstream and building on top of this new tech was the | premise of the business more than selling books cheaply and | quickly was. | | Most of the startup opportunities in the last couple decades | were built off the back of several deeper tech breakthroughs | like mass mobile phone adoption and virtualization. I think | more founders have been successful just riding these tech waves | than sticking to a problem space. Brian Chesky didn't work in | hotel management and Travis Kalanack didn't work in | transportation. They were just familiar with cutting edge | consumer tech and applied it to problems they had no familiar | with before they started. | bmitc wrote: | I think this also points out the timing aspect. The big | "breakthrough" companies (breakthrough in terms of | capitalistic successes) happened since people were in the | proverbial right place and time with the right idea. | pyinstallwoes wrote: | Bezos built Amazon to solve the traveling salesman problem. | doitLP wrote: | But that spawned the traveling delivery truck problem. | xcambar wrote: | Then to be shadowed by the traveling delivery drone | problem. | pjdesno wrote: | Note that choice of starter product is important. Amazon | started with books - you know exactly what you're getting, | they always fit, they're hard to damage, they have pretty | high markups and low shipping costs. People were willing to | risk buying books online, back when online e-commerce | basically consisted of the USENET misc.forsale groups. | | Tesla and many other EV companies started with low-volume | expensive sports cars, with high margins so they could be | basically hand-crafted. (Tesla actually bought the | chassis/body/interior from Lotus) If they had started with | the Model 3, they'd have gone bankrupt long before they sold | any. | koonsolo wrote: | I think Bezos also mentioned that he started with books | because no single physical shop could have all the books, | but Amazon could. It is a product with so many variations | that Amazon had a clear competitive advantage. | bsder wrote: | Amazon's competitive advantage was _not paying any tax_. | Amazon 's selection in technical books was quite poor for | quite a while. | | However, the tax discount drove _ALL_ the small, local | technical booksellers out of business. It might have | happened anyway since local sellers had to pay retail | rent and so Amazon had a structural advantage. However, | Amazon also gained a straight 8% advantage for not having | to pay tax. | galdosdi wrote: | Another now-classic example of solving this chicken and egg | problem, I think: Facebook starting with just Harvard, then | ivy league colleges, then colleges, then colleges and high | schools, and only finally the general public. At each stage | the arena was small enough it was realistic to take the | whole segment over, and then that became the seed for the | next phase. | SatvikBeri wrote: | And their second product was CDs/DVDs, which have a lot of | the same properties. Then they opened Amazon Marketplace, | allowing other stores to sell through their site, and used | the data of what was popular there to expand into other | products - they were consistently very deliberate about | what to sell next. | m0llusk wrote: | Amazon is mostly driven by AWS which is a very new paradigm for | building business services. Insurance has been revolutionized by | new methods for collecting and analyzing data in order to | estimate risk. Monsanto's latest growth play is farmland and crop | insurance. The examples used in this piece appear to demonstrate | the opposite of what was intended. | melenaboija wrote: | Yup, that is similar to what my grandma used to say and that will | always work: "buy cheap and try to sell as expensive as you can" | and sometimes adding "it does not matter if clients need it as | long as you can convince them they do". | | She was an entrepreneur of 1950's that started a small retail | business. | ismail wrote: | I like to think about it this way. | | The "what" is often timeless and stays the same. | | The "how" the what is achieved changes. | | I need to get from point a to point b (the what) | | V1: walk/run/horse | | V2: carriage | | V3: train | | V4: cars | | Etc etc | | There is another dimension to this as well. | | Sometimes the what has to completely be re-architected since | society has fundamentally changed. | | As an example: | | Consider education (what) this will always be required in | society. | | A naive version of innovation in this space would be to keep | things the same and just change the delivery mechanism (online) | | A better innovation would be to re-imagine what it means to be | educated/schooled. | | The best place to start is identifying the assumptions inherent | in the current system. , and asking are they still relevant? | [deleted] | cs702 wrote: | As usual, I find myself nodding in agreement whenever I read | anything written by Morgan Housel on this blog. It is evident he | has thought deeply about the topic of each post, and wants to | share his hard-earned insights with the rest of the world. | | Long-term compounding of wealth indeed comes from betting on | things that won't change over the course of a lifetime. | hardware2win wrote: | So seems like I should invest in semiconductors | CPLX wrote: | The irony of comparing Andreeson and Buffet and claiming they | have completely opposing investment theses is pretty hilarious. | | They both have the exact same approach, which is to seek | companies that have or will create monopoly effects in their | markets, using dominance of a market segment to raise prices and | extract rents. | | Same investment strategy that's made basically every vast fortune | since we invented the cotton gin. | TimPC wrote: | So they have the same strategy in the sense that absolutely | everyone who ever made money had one strategy and they have a | different strategy in a way that is useful and informative? I'd | label that different rather than same. | CPLX wrote: | Most people have a different strategy, which involves | producing a product or service of value. | | Megalomaniacal monopolists such as these two seek to extract | monopoly rents by cornering markets. | | Their differences with each other are trivial, and the | contrast between them and nearly everyone else in the normal | business world is stark. | | They are robber barons, it's not some new and exciting story, | it's a tiny class of humans, there's only a few dozen at any | given time. | | > the term was typically applied to businessmen who | purportedly used exploitative practices to amass their | wealth.[2] These practices included exerting control over | natural resources, influencing high levels of government, | paying subsistence wages, squashing competition by acquiring | their competitors to create monopolies and raise prices, and | schemes to sell stock at inflated prices to unsuspecting | investors. | | Sound familiar? | | https://en.wikipedia.org/wiki/Robber_baron_(industrialist) | elefantastisch wrote: | This article seems like a good reminder to know what your | fundamentals are and to be deliberate about picking them. | | But I'm not convinced that this advice can be used to _pick_ your | fundamentals, your core business model. | | Amazon opted for more choices and lower prices. | | Barnes & Noble stuck with faster solutions to problems (get your | book today not after a week of shipping as was common when Amazon | started), deeper human interactions (you can go into the store | and ask someone for recommendations, meet authors, etc.), and | increased confidence/trust (you know what you're getting because | you can hold it in your hand and read it before you buy it). | | Low-cost carriers have moved in on traditional airlines because | while it's true that people will never stop caring about added | comfort, it turns out they care about lower prices much more. | | But Apple built a staggering market cap relying on the assumption | that while people care about lower price, they care about great | control of your time (just works) and higher social status more. | | So it seems like this article provides a good framework for | thinking about your business, but doesn't give any answers as to | the actual strategy you should use. | | Or am I missing something? | unity1001 wrote: | Common theme seems to be making things easier and cheaper. | eric-hu wrote: | Pretty solid point. | | I read TFA's take on fundamentals as neutral on the examples | given. There was mention that Amazon survived where Beenz did | not because they picked the right mix of changing and | unchanging. On the other hand, the juxtaposition of Andreeson | and Buffett says that you can find business success with | seemingly opposite fundamentals. | bippingchip wrote: | For me this is a good example of the old adage that you should | not confuse vision with strategy. | | The vision is you realize the universal truth (in Amazon's case | people want things cheap and fast). | | The strategy is how you deliver on making that visions reality. | This is what you call (rightly so) your core business model. | | Only experience people tend to get all caught up in the big | ideas of the vision (especially middle managers) but spend far | to little time on making the hard choices that come with | deciding in strategy: it's as much, if not more, about deciding | what _not_ to do as it is commitment to what you will do to | realize your vision. | bovermyer wrote: | Something that we often forget is this: | | Do boring things well. | | It's easy to chase the newest technology, the newest features, | the newest markets. But unless you pay attention to the boring | things too, you've set your feet on sand instead of stone. | tomrod wrote: | Reminds me of: https://boringtechnology.club/ | dpatru wrote: | It seems to me that at the implementation stage, the things that | never change and the things that do change are the same. For | example, customers will always want low prices and fast delivery. | Internet ordering and robots in warehouses are things that | change. But the changes are better ways to fulfill the unchanging | needs. So Bezos sees investments in internet ordering and robots | as investments in what does not change. Whereas Andreessen sees | the same investments as betting on change. So what difference | does their point of view make if both entrepreneurs end up making | the same investments? | breck wrote: | "If you want to invent something that will still be used in 30 | years, invent something that would have been used 30 years ago." | - [taleb i think] | highfrequency wrote: | > I very frequently get the question: "What's going to change in | the next 10 years?" That's a very interesting question. I almost | never get the question: "What's not going to change in the next | 10 years?" And I submit to you that that second question is | actually the more important of the two. You can build a business | strategy around the things that are stable in time. In our retail | business, we know that customers want low prices, and I know | that's going to be true 10 years from now. They want fast | delivery; they want vast selection. | | Also Bezos (paraphrased): "While working at D.E. Shaw, I heard | that the internet was growing at 2,300% per year. And I asked | myself: 'what kind of business makes sense to start in the | context of that kind of growth?'" | | The Holy Grail is when a big change allows you to get a foothold | in solving a fundamental, unchanging problem better than it has | been solved before - and then leveraging that foothold with rapid | iteration and growth. | makestuff wrote: | I wonder if back in 1990s people were as skeptical of the | internet as they are of the metaverse/web3/crypto/autonomous | driving today. All of the big money bets seem to be in these | areas, and I wonder if there were a similar group of 4-5 | industries that all of the money was going to in the 90s only | for the internet to win out in the end as the best returns for | investors. | tabtab wrote: | "It's tough to make predictions, especially about the | future." -- Yogi Berra | | For every ten IT trends/fads, roughly only one has staying | power in my observation. The others often move into niches or | fade. | | If anyone was that good at predicting the diamonds from the | duds, they'd be golfing with Warren Buffett instead of poking | around Hacker News. | | Note that I thought the internet had big potential in the | late 90's, as I was getting hooked on Compuserve (a precursor | to webbish things). I just didn't think it would ruin biz | CRUD/GUI's, rather staying in the consumer lane. | galdosdi wrote: | I remember that time, and no, it was nothing like crypto. A | better analogy would be electric vehicles today. | | Yes, a loose analogy can be made in that there was a hyped | technology that some people thought might become huge, others | thought might merely become large or medium sized, and most | others were pretty unaware or didn't care. | | Unlike with crypto, during the late 90s internet/PC/web usage | explosion, though, there were decades of successful smaller | scale use (BBSes, academic use of the internet, etc). It was | just a matter of scaling it up. The future was already here, | just unevenly distributed. | | Unlike crypto, a lot of the usages were not just emotionally | exciting, but actually practical. You could look up a stock | quote right away instead of looking at an outdated quote in | the paper, or calling a broker on the phone, or having a | dedicated fancy service just for that. You could email a | friend half way around the world. You could read the full | text of a book for free, if it was from before 1923. In | general, you could transmit information freely and cheaply | across the world -- as long as both recipient and sender were | on the internet somehow. | | All of those things previously were not possible that easily. | There were faxes and landline phones already, but they had | their obvious limitations. | | Crypto is totally different. It's been hyped for two decades | and, except for illegal activities, still hasn't enabled | anything that could not be done more efficiently with SQL | database to track who owns what, and a system of courts and | law enforcement to enforce property rights and enforce | contracts. | | If you think they are similar you probably don't remember | just how different it was to not have a single simple easy | way to get and receive information. You had to actually go | specific places or talk to specific people. You would do | stuff like check movie times in the newspaper, and make | specific plans to meet people at specific times. | | I still remember when Tell Me came out. It was a phone number | interface to some basic internet applications like weather, | news, sports, movie times. You called 1-800-TELL-ME and | followed the prompts. It was massively popular. | | Where is crypto's TellMe moment? Nowhere. The only useful | thing I've ever been able to do with crypto is accidentally | profit $8000 because I forgot I had owned some I had bought | as a joke... which came directly out of someone else's pocket | later when it crashed. | | If you're looking for a historical analogy, tulipmania is a | good one. So is the boom in joint stock companies in the | 1600s. So is the plank road boom of the late 1800s. | | Nobody had as strong opinions about the internet being a | horrifying scam, like many do about crypto. Because it | wasn't, and there was no reason to think it was. The main | "issue" was, would it catch on? Was it too nerdy? I mean, | it's not like now, where the internet is almost slightly cool | to some young people. Buying a modem was extremely uncool. | And it cost a lot of money. So it was more of a question of | "Is it really ready for prime time yet or does it need to | become easier to use and cheaper?" much like EVs today. And, | again, like EVs today, the problem was solved gradually but | exponentially... each succeessive cost decrease or simplicity | increase lead to another wave of converts, which made the | whole thing more useful, solving the chicken and egg problem | gradually | l8nite wrote: | I'm replying only because I worked at Tellme, and I'm happy | other people remember it still! :) ___________________________________________________________________ (page generated 2022-11-21 23:00 UTC)